Cost Accounting Study Guide

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Study guide
Management Accounting

This module has been developed using material with the acknowledgement and permission of Horngren, C.T., Datar, S., Foster, G., Rajan, M., Ittner, C., Wynder, M., Maguire, W. and Tan R. (2010), Cost Accounting; a Managerial Emphasis (1st Australian Edition), Prentice Hall International, Englewood Cliffs, New Jersey. We greatly appreciate the support of Leanne Lavelle of Pearson/Prentice-Hall Australia throughout the process.

The University of South Australia is grateful to the publishers, agents and authors who have allowed use of their work in this study guide. While every care has been taken to establish and acknowledge copyright, we tender apologies for any accidental infringement. We are pleased to suitably address any case.


Introduction to ACG24 Study Guide
This study guide provides a complement to the ACG24 text book by Horngren et al. Revised Edition (2011). The Horngren text book is the main source of information on any particular topic for the course, where this study guide integrates with and reinforces the concepts covered in the text book. The contents of this study guide point out learning objectives, introduce topics and provide fundamentals only it is not a replacement for the textbook. We suggest you adopt a pattern of study as follows:

* Read the textbook chapter/s to gain an introduction to and knowledge of the topic. * Read the textbook chapter a second time followed by working the activities listed at the end of the Study Guide topic. Below is an example of the format used for providing activities to work for a topic: | Work the end of chapter Problem for Self StudyActivities from your text bookQuestions: 15-1, 15-3, 15-10Exercises: 15-16, 15-20, 15-21MyAccountingLab Chapter 15|

Following completion of the activities, compare your solutions posted on the unit web page at the end of each week and review the study guide material. To round out your study, access the Horngren et al. (2011) support for learning that is available online and find MyAccountingLab. The information for access is provided in the booklet – Student Access Kit – that accompanies your Horngren et al. textbook.

MyAccountingLab provides online activities to assist you in assessing your level of learning. In MyAccountingLab you receive feedback immediately after taking a test, so you can evaluate areas of strength and weakness for a topic. As a result, you become aware of those areas that require further study.


Introduction to ACG24 Study Guide3
Topic 1: Management accounting in context6
Topic 2: An introduction to cost terms and inventory costing10 Topic 3: Product and service costing: Job Costing16
Topic 4: Product and service costing: Process Costing22
Topic 5: Activity-based costing and activity-based management26 Topic 6: Allocation of support-department costs, common costs and revenues30 Topic 7: Master budget and responsibility accounting33

Topic 8: Flexible budgets, direct-cost variances and management control37 Topic 9: Flexible budgets, overhead cost variances and management control42 Topic 10: Cost-Volume-Profit Analysis47
Topic 11: Decision making and relevant information and pricing decisions52
Part I: Decision making and relevant information52
Part II: Pricing Decisions and Customer-Profitability Analysis56

Management accounting in context



Learning Objectives
On completion of this topic you should be able to:

* Explain the way in which cost accounting supports management accounting and financial accounting * Explain the role of management accounting in sustainability decisions * Explain the way in which management accountants influence strategic decisions * Describe the set of business functions in the value chain * Identify the key success factors that customers are expecting companies to meet * Explain the five-step decision-making process and its...
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